Progressive Mailing House Pty Ltd v Tabali Pty Ltd
57 ALR 609(Judgment by: Brennan J)
Between: Progressive Mailing House Pty Ltd
And: Tabali Pty Ltd
Judges:
Mason J
Wilson J
Brennan JDeane J
Dawson J
Subject References:
LANDLORD AND TENANT
LEASE
Memorandum of
Breach of covenant to pay rent
Whether repudiation
Re-entry
Other rights of termination
Lessor's loss of benefit of covenants
Damages for loss
Applicability of ordinary principles of contract law
REAL PROPERTY
Torrens system
Unregistered memorandum of lease
Rights of parties thereunder
DAMAGES
Lessor's re-entry on repudiation
Loss of benefit of covenants
Whether damages recoverable
CONTRACTS
Breach
Fundamental
Leases
Applicability to
Case References:
Shevill v Builders Licensing Board - (1982) 149 CLR 620; 42 CLR 305
National Carriers Ltd v Panalpina (Northern) Ltd - [1981] AC 675
Judgment date: 12 March 1985
Canberra
Judgment by:
Brennan J
The respondent was the lessor and the appellant was the lessee in possession of land at Artarmon under an unregistered though registrable memorandum of lease for a term of five years. In an action brought by the lessor in the Supreme Court of New South Wales, Lusher J found that the lessee had committed breaches of certain covenants including the covenant for the payment of rent. The memorandum of lease contained a proviso for re-entry in the events, inter alia, of non-payment of rent for 14 days after the due date or of failure to observe or perform a lessee's covenant after service of a 30-day notice to do so. It was not disputed that, given the occurrence of breaches of covenant, service of the statement of claim (which sought leave to issue a writ of possession) "amounted to a forfeiture of the lease". Relief against forfeiture was refused. His Honour gave leave to issue a writ of possession and ordered an inquiry before a Master to ascertain the amounts due to the lessor under the lease and as mesne profits. In addition, Lusher J awarded the lessor $85,000 damages for breach of contract. The lessor had claimed damages "in respect of the cost of reletting and delay in reletting premises that would follow the plaintiff obtaining possession". Lusher J held that, although rent cannot be recovered after forfeiture, "a lessor may recover damages for breach of a covenant to pay rent into the future, in other words, for the loss of the benefit of the covenant". His Honour assessed damages accordingly. The Court of Appeal dismissed an appeal against the judgment. The sole question on this appeal is whether the lessor was entitled to damages for the loss of the benefit of the covenant or, more precisely, for the loss of the benefit of the lease.
When a lease is determined prior to the expiry of the term, the covenant to pay rent for the unexpired portion of the term ceases to bind the lessee. Once the lease is determined, the lessee commits no breach of covenant by reason of his non-payment of rent for that unexpired portion: Jones v Carter (1846) 15 M & W 718 at 726; [153 ER 1040 at 1043]. A lessor who, under a proviso for re-entry, serves the lessee with process for recovery of possession is entitled to mesne profits for the period during which the lessee remains in possession after service (Canas Property Co Ltd v K L Television Services Ltd [1970] 2 QB 433). The lessor may thereby recover an amount equal to the rent in respect of that period. But mesne profits are damages for trespass; mesne profits are not rent, nor are they damages for breach of a covenant to pay rent.
A lessor can recover damages for loss of the benefit of a lease only where the lessee has repudiated the lease before determination of the term. Such a repudiation is not necessarily established by proving a default in the payment of rent. In Shevill v Builders Licensing Board (1982) 149 CLR 620 at 627; 42 ALR 305 at 309, Gibbs CJ said with the concurrence of Murphy J and me:
"It is clear that a covenant to pay rent in advance at specified times would not, without more, be a fundamental or essential term having the effect that any failure, however slight, to make payment at the specified times would entitle the lessor to terminate the lease."
The Chief Justice stated the general principles governing the rescission of contract for anticipatory breach (CLR at pp 625-6; ALR at 308). Repudiation by anticipatory breach occurs:
"... if one party renounces his liabilities under it - if he evinces an intention no longer to be bound by the contract (Freeth v Burr (1874) LR 9 CP 208 at 213) or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way (Ross T Smyth & Co Ltd v T D Bailey, Son & Co [1940] 3 All ER 60 at 72; Carr v J A Berriman Pty Ltd (1953) 89 CLR 327 at 351). In such a case the innocent party is entitled to accept the repudiation, thereby discharging himself from further performance, and sue for damages: Heyman v Darwins Ltd [1942] AC 356 at 399. It is convenient to say that the injured party in these circumstances rescinds the contract, although there is, of course, no rescission ab initio : Johnson v Agnew [1980] AC 367 at 392-3."
In the present case, the lessee's breaches of covenant are said to show an intention to act, and to act only, in a manner substantially inconsistent with his obligations under the lease. For the reasons stated by Mason J, I think that the lessee did show such an intention and that the lessee repudiated the contract embodied in the lease. That conclusion makes it necessary to decide in this case what was assumed but not decided in Shevill v Builders Licensing Board, namely, whether the general contractual principles relating to rescission for anticipatory breach and damages for the loss of benefit of a contract apply when a lessee, by words or conduct, repudiates his obligations under the lease. It is the character of a lease as a demise which may be thought to exclude the operation of those principles. For reasons that I shall state presently I would hold that ordinary contractual principles do apply to a lease, but that the character of a lease as a demise distinguishes the consequences of their application from their application to a contract that is not also a demise. If ordinary contractual principles apply to a lease, a fortiori they apply to an agreement to grant a lease or to an unregistered memorandum of lease which is not effective to convey a legal leasehold interest (cf Leitz Leeholme Stud Pty Ltd v Robinson [1977] 2 NSWLR 544). It is therefore appropriate to consider the question on the footing that the memorandum of lease was effective to convey such an interest. The parties agreed that Lusher J should decide the matter on the footing that the memorandum had been registered and that agreement requires the question to be considered on the footing that a legal interest was conveyed to the lessee.
In Total Oil v Thompson Garages [1972] 1 QB 318 at 324, Lord Denning MR thought that a lease, being a demise as well as a contract, does not come to an end on repudiation and acceptance. His Lordship thought that views expressed by Lord Russell of Killowen and Lord Goddard in Cricklewood Property and Investment Trust Ltd v Leighton's Investment Trust Ltd [1945] AC 221, that frustration does not bring a lease to an end supported the view that repudiation and acceptance does not do so. Holding that the lease continued, his Lordship rejected an argument that a breach by the lessor gave the lessee an option to be relieved of its contractual obligations. Subsequently, in National Carriers v Panalpina Ltd [1981] AC 675, the House of Lords held that the doctrine of frustration can, in principle, apply to leases. Lord Wilberforce said (at p 694) that "there is nothing illogical in implying a term that [the lease] should be determined on the happening of ... events ... which in an ordinary contract work a frustration". The speech of Lord Simon of Glaisdale contains a passage to the same effect (at p 705). The question whether the doctrine of frustration is excluded when the contractual obligation relied on is created by an instrument of lease was considered by this court in Firth v Halloran (1926) 38 CLR 261. Opinions were divided. I do not stay to consider that question, for we are not now concerned with a suggested determination of a lease by frustration. Discharge of contract by frustration and discharge by repudiation and acceptance are distinct modes of termination of contract to which different consequences attach. There is no valid analogy between the implication of a term that determines a lessee's interest on the happening of a frustrating event and the implication of a term empowering a lessor to elect to determine a lease before the expiry of the term granted in the event of repudiation by the lessee, especially if the term is to be implied in a lease which contains an express power to determine the lease in the event of a breach of covenant. An implied term that a lease should determine on the happening of a frustrating event is in the nature of a limitation. An implied term that a lessor should have an election to determine if the lessee should repudiate is in the nature of a condition. Where, as in the present case, a lease contains a proviso for re-entry in certain events including the commission of specified breaches of covenant, it is not possible to imply a term which entitles the lessor to determine the lease in the event of anticipatory breaches of covenant that do not constitute a specified breach of covenant. The lessee's interest in the land, once vested in him by the demise, may be divested by breach of a condition of defeasance (as described in Bashir v Commissioner of Lands [1960] AC 44) or by exercise of a power of re-entry for breach of covenant expressly reserved by the lease. A lessee's contravention of the provisions of a lease does not otherwise empower a lessor to determine the lease (Doe d Dixon v Roe (1849) 7 CB 134; [137 ER 55]). Thus Woodfall's Law of Landlord and Tenant 28th ed (1978) says, at p 836:
"A lease may be determined by entry or ejectment for a forfeiture incurred either by (1) breach of a condition in the lease; or (2) for a breach of any covenant, in case (and in case only) the lease contain a condition or proviso for re-entry for a breach of such covenant."
A footnote reads:
"It is of importance that a lease for years should contain a proviso for re-entry for non-payment of rent at any rate, as otherwise the lessor may find himself saddled with an impecunious tenant, and not be able to get rid of him."
In Hallen v Spaeth [1923] AC 684, the lessee sub-demised for the whole of the term contrary to the stipulation in his lease, but Viscount Haldane, delivering the judgment of the Judicial Committee, said (at p 687) that "the lease conferred on the lessor no right to put an end to the term for such a breach, and his remedy was merely in damages for breach of agreement". It may be noted in passing that the issue in that case turned on a provision in the sub-demise which did not touch or concern the interest which passed to the sub-lessee, and it was in reference to that circumstance that his Lordship said (at p 690) that "it is the contract between the sub-lessor and his sub-lessees, and not the estate which passed, which is the determining factor". Isaacs J referred to those words in Firth v Halloran, but neither that reference nor the speeches in Hallen v Spaeth support the proposition that a lessor may determine a lease by mere acceptance of a lessee's repudiation of his obligations under the covenants of a lease where the lessee's interest in the land is not liable to forfeiture. It would be a curious law which permitted a lessee in breach of covenant to seek relief against forfeiture while denying the prospect of relief to a lessee who had committed an anticipatory breach.
A lessor's inability to determine a lessee's interest except where it is liable to forfeiture precludes the lessor from rescinding the lease for anticipatory breach, but it does not follow that the ordinary contractual principles relating to anticipatory breach do not apply to a lease where the lessee's interest is liable to forfeiture.
An objection taken in some jurisdictions to the application of those principles to leases is that a lease is a contract that has been executed or substantially executed by the lessor and that the principles relating to anticipatory breach apply only where the innocent party puts an end to executory obligations resting on him. It is true that, under an ordinary lease, the lessor's granting of the term discharges by performance his chief obligation, and the executory obligations under the lease rest chiefly on the lessee. If the lessor be under no executory obligations (or if his executory obligations be insubstantial), rescission for anticipatory breach by the lessee makes no difference (or no substantial difference) to the position of the lessor: he has parted with the leasehold interest and that interest is not liable to be revoked by mere rescission. In the leading case of Hochster v De La Tour (1853) 2 E & B 678; [118 ER 922], Lord Campbell CJ advanced (at p 690 [p 926]) as a reason for the rule relating to anticipatory breach the desirability of absolving the promisee from performance of his executory obligations:
"... it is surely much more rational, and more for the benefit of both parties, that, after the renunciation of the agreement by the defendant, the plaintiff should be at liberty to consider himself absolved from any future performance of it, retaining his right to sue for any damage he has suffered from the breach of it."
In Mersey Steel and Iron Co v Naylor, Benzon & Co (1884) 9 App Cas 434 at 443-4, Lord Blackburn said:
"The rule of law, as I always understood it, is that where there is a contract in which there are two parties, each side having to do something (it is so laid down in the notes to Pordage v Cole [1 Wms Saund 548 (ed 1871)]), if you see that the failure to perform one part of it goes to the root of the contract, goes to the foundation of the whole, it is a good defence to say, 'I am not going on to perform my part of it when that which is the root of the whole and the substantial consideration for my performance is defeated by your misconduct'" (emphasis added).
In Mackenzie v Rees (1941) 65 CLR 1 at 15-16, Dixon J noted that there was then no English decision which applied the doctrine of anticipatory breach to contracts completely executed on one side and that that was the view of Anson in his first edition of the Law of Contracts (1879). His Honour quoted from the American Restatement of the Law of Contracts Art 318 e, p 477:
"There must be some dependency of performances in order to make anticipatory breach possible."
That view commands substantial though not uniform support in the United States. Cooke J reviewed the authorities in Long Island Rail Road Co v Northville Industries Corp 362 NE (2d) 558 (1977), where he said (at p 563):
The doctrine of anticipatory breach has not generally been applied to all types of contracts, its application being limited ordinarily to bilateral contracts embodying some mutual and interdependent conditions and obligations. Moreover, limitations on the doctrine exist even in the instance of 'a contract originally bilateral that has become unilateral and similarly unconditional by full performance by one party' ... For the doctrine to apply there must be 'some dependency of performances' (Restatement, Contracts, §318, Comment e). For this reason, a party who has fully performed cannot invoke the doctrine even though the other party has repudiated.
The circumstances that obligations which have been performed are not affected by rescission for anticipatory breach does not necessarily mean that damages for anticipatory breach are denied to a party who has performed his obligations. The principles relating to anticipatory breach put both a shield and a sword in the hands of an innocent party who accepts the other party's repudiation. His shield is the ending of his executory obligations; his sword is an immediate right to damages. Where the contract has been fully performed by one party, no question of repudiation by him arises and he is under no executory obligation from which he might wish to be discharged in the event of repudiation by the other party. He has no need of a shield. But he may wish to brandish a sword. Although the paradigm case in which the principles are applied involves interdependent executory obligations, anomalies would occur if there were an unqualified rule that damages for repudiation by anticipatory breach should be refused where the innocent party has fully performed his obligations, but granted where he has not. Whether the contract be executed or executory, it can be said that repudiation causes the innocent party loss of the benefit of the contract. Indeed, where the innocent party has fully performed his obligations, a repudiation by the other party deprives him not only of the profit to which his bargain entitled him but also of compensation for the cost incurred in performing his obligations.
On the other hand, it can be said that a party who has performed his obligations under a contract is entitled to no more and no less than the full and timeous performance of the obligations resting on the other party, and that an immediate award of damages for anticipatory breach of those obligations gives him more than the benefit of his bargain. There is substance in the observation by Williston on Contracts 3rd ed (1968), vol 11, §1313 that:
"The law can properly excuse a promisor from performing whenever justice requires, but it does not have the same liberty of enlarging a promisor's contractual obligations."
Cardozo J speaking for the Supreme Court of the United States in New York Life Insurance Co v Viglas 297 US 672 (1935) [80 L Ed 971], held that a mere creditor, whose debtor repudiated his obligation to pay future instalments of money due, could not advance the time for payment by accepting the repudiation, saying (at p 680 [p 976]):
"... a party to a contract who has no longer any obligation of performance on his side but is in the position of an annuitant or a creditor exacting payment from a debtor, may be compelled to wait for the instalments as they severally mature, just as a landlord may not accelerate the rent for the residue of the term because the rent is in default for a month or for a year."
And in Mackenzie v Rees, Dixon J (65 CLR at p 16) cited Canadian authority for the proposition that the time for payment of a debt due on a particular day cannot be accelerated though the debtor declare his intention to dispute his liability.
Where an innocent party has done no more than perform all his obligations under a contract in accordance with its terms, there is something to be said for a rule that gives him no more than he bargained for, that is to say, damages against the repudiating party for failure to discharge that party's obligations as and when they fall due. A strong case can be made for such a rule when the innocent party's performance of the contract results in the conferring of an irrevocable benefit on the other party and the only executory obligation of the repudiating party is to pay money at a future time: see Williston on Contracts 3rd ed (1968), vol 11, §1326. Why should repudiation entitle the innocent party to accelerated payment when the contract stipulates that, in the circumstances that have occurred, that party should receive payment at a later time? But compare the views of Corbin on Contracts (1951), vol 4, §963.
However, there is no warrant for such a rule when the innocent party can and does revoke the benefit which the innocent party's performance of his obligations conferred on the repudiating party. Revocation of the benefit places the parties in a position similar to the position they would have been in if the contract had remained executory. Unless the innocent party has a right to damages in these circumstances, he cannot recover the benefit of his bargain. If he revokes the benefit that was conferred on the repudiating party, he cannot insist on the performance by that party of the interdependent obligations that fall due thereafter. Unless he is entitled to damages, he can obtain the benefit of the bargain only by foregoing the right to revoke the benefit, trusting that the other party will repent and perform the obligations he repudiated. The principles relating to anticipatory breach are intended to avoid the necessity for useless performance and to mitigate the damages for which the repudiating party is liable by permitting the innocent party to dispose of any property, services or other benefits to which the repudiating party would have been entitled under the contract. It accords with principle to permit a lessor to recover damages for anticipatory breach by a lessee when the benefit which has passed to the lessee - the interest in the land demised - is revoked by enforcing a forfeiture or by some other means of determining the lease. It accords too with authority.
Buchanan v Byrnes (1906) 3 CLR 704 was a case where the lessor of licensed premises claimed damages against a lessee who had abandoned the premises. The lease was surrendered. Barton J held that the lessor was entitled to damages on accepting the lessee's repudiation. He said (at p 719):
"It must not be forgotten that a right of action had arisen on the termination of the correspondence on the 28th June, as the defendant had given distinct notice of his intention not to perform his covenant. There was at that time a renunciation which, at the plaintiff's option, amounted to a breach of the covenants that throughout the term he would carry on a licensed victualler's business upon the premises and keep them open and in use as an inn, etc, and of the covenant not to do anything which might entail forfeiture of the licence ... as well as of the subsidiary covenants. The plaintiff was then entitled to claim in an immediate action, prospectively, such damages as would be caused by a breach at the appointed time, subject to any circumstances which might operate in mitigation of damages: Leake on Contracts, 4th ed, 617-8, and cases there cited, especially Hochster v De La Tour (1853) 2 E & B 678, and Johnstone v Milling (1886) 16 QBD 460."
Griffith CJ (at p 714) and O'Connor J (at p 721) also held that the lessor was entitled to damages.
Subsequently, in Lamson Store Service Co Ltd v Russell Wilkins & Sons Ltd (1906) 4 CLR 672 at 684, Griffith CJ stated the measure of the damages:
"In the ordinary case of a demise for a term of years with an express covenant to pay the rent, if the lessee unequivocally repudiates the lease and abandons the land, the lessor may at his option bring an immediate action for breach of covenant, in which he will be entitled to recover the full amount of the agreed rent for the whole term, less such sum as a jury may think he is likely to derive as profits from the use of the land during the residue of the term: Buchanan v Byrnes (1906) 3 CLR 704. This is the ordinary rule of damages."
Thus in Hughes v NLS Pty Ltd [1966] WAR 100 (affirmed on different grounds: (1966) 120 CLR 583) a repudiation of a lease by the lessee was followed by a surrender and Jackson J, applying Buchanan v Byrnes, held (WAR at p 102) that:
"Until surrender, [the lessor] can sue for rent as such; after surrender, he is limited to damages for loss of rent flowing from the lessee's breach of contract."
Buchanan v Byrnes was followed by the Supreme Court of Canada in Highway Properties Ltd v Kelly, Douglas & Co Ltd (1971) 17 DLR (3d) 710. Laskin J (as he then was) delivering the judgment of the Supreme Court, thought that this court's approach had cut through artificial barriers to relief, but he went on to say (at p 721):
"Although it is correct to say that repudiation by the tenant gives the landlord at that time a choice between holding the tenant to the lease or terminating it, yet at the same time a right of action for damages then arises; and the election to insist on the lease or to refuse further performance (and thus bring it to an end) goes simply to the measure and range of damages. I see no logic in a conclusion that, by electing to terminate, the landlord has limited the damages that he may then claim to the same scale that would result if he had elected to keep the lease alive."
With great respect, that approach seems to me to go beyond the principles of anticipatory breach as understood in this country. An election to bring a lease to an end seems to me to be a condition of liability and not simply a factor relevant to "the measure and range of damages". A right of action for damages has not been thought to arise until the innocent party elects to accept the repudiation. Bowen LJ said in Johnstone v Milling (1886) 16 QBD 460 at 472-3:
"It would seem on principle that the declaration of such intention by the promisor is not in itself and unless acted on by the promisee a breach of the contract; and that it only becomes a breach when it is converted by force of what follows it into a wrongful renunciation of the contract."
A promisor cannot, by repudiating his obligations, unilaterally alter the legal relationships between himself and the promisee. Until the promisee accepts the repudiation, the rights and obligations arising from the partial execution of the contract and causes of action that accrue from its breach continue unaffected (McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 477). The promisee's acceptance of the repudiation is an essential element in the cause of action for damages for anticipatory breach. That is because the liability in damages is substituted for the executory obligations to which acceptance of repudiation puts an end. Lord Diplock explained in Lep Air Services v Rolloswin Ltd [1973] AC 331 at 350:
"Generally speaking, the rescission of the contract puts an end to the primary obligations of the party not in default to perform any of his contractual promises which he has not already performed by the time of the rescission. It deprives him of any right as against the other party to continue to perform them. It does not give rise to any secondary obligation in substitution for a primary obligation which has come to an end. The primary obligations of the party in default to perform any of the promises made by him and remaining unperformed likewise come to an end as does his right to continue to perform them. But for his primary obligations there is substituted by operation of law a secondary obligation to pay to the other party a sum of money to compensate him for the loss he has sustained as a result of the failure to perform the primary obligations. This secondary obligation is just as much an obligation arising from the contract as are the primary obligations that it replaces..."
Acceptance of a surrender by a lessee who has repudiated a lease is at once an acceptance of the repudiation and a determination of the lessee's interest in the land. Where the lessee repudiates but does not give up possession, a lessor's acceptance must take some other form. Unless the lessee's interest in the land is determined in some way, there can be no rescission of the contract, for the lessee continues to enjoy the benefit of the demise and to be liable to perform at least those covenants which touch and concern the land. So long as the lessee retains the interest which he took under the demise, neither party can put an end unilaterally to the executory obligations under the lease. Total Oil v Thompson Garages, supra, was an instance of a lessor, an oil company, failing to observe the credit terms for the supply of petrol contained in a lease of a tied service station. It was held that the service station operator, remaining in possession of the site, was not entitled to put an end to the tie, though it was not enforceable by the oil company until the company mended its ways. Edmund Davies LJ said ([1972] 1 QB at p 325):
"The defendants were admitted to the premises solely upon the terms of the lease containing several components which are unseverable, in my judgment. They stand or fall together. Despite the repudiation by the plaintiffs of part of the lease and the defendants' acceptance thereof, I cannot accept that, as to the latter's occupancy during the remainder of the 14-year term, they would be able to say, 'We are entitled to remain in possession without regard being paid to where we obtain our petrol supplies'."
Where the lease is liable to forfeiture, as it was in the present case, enforcing the forfeiture both determines the lessee's interest in the land and constitutes the lessor's election to accept the repudiation. Conversely, a waiver of the forfeiture constitutes the lessor's election to keep the lease on foot. It is not necessary to consider the possible effects of statutory restrictions on the enforcing of a forfeiture or of the granting of relief against forfeiture, except to bear in mind that the condition on which the lessee's liability in damages for repudiation arises is that he ceases to be liable to perform the executory obligations resting on him under the lease.
Once the lessee's interest is determined, there is no reason why damages should not then be recoverable, provided the lessor has not previously made an election to keep the lease on foot. Where it is necessary for a lessor to determine a lease by re-entry under a proviso for re-entry contained therein, does his reliance on the proviso evidence an election to keep the lease on foot? In Johnstone v Milling, supra, where the lease conferred a power on the lessee to give a notice putting an end to the term at the expiration of the first four years and the lease was determined accordingly, Lord Esher MR regarded the giving of the notice as indicative of an affirmation of the contract. He said (16 QBD at pp 468-9):
"He did not renounce the lease or give up the premises. He did not do any act which affected the existence of the contract. He made no declaration of intention to treat it as rescinded except for the purpose of bringing his action upon it. On the contrary, at the time fixed by the contract he gave the requisite notice to determine the lease."
The giving of the notice was to be seen in conjunction with the lessee's failure to renounce or give up the premises. His conduct as a whole affirmed the contract. A lessor is in a different position if the lessee remains in possession. In that event, a lessor who enforces a forfeiture in accordance with the lease as soon as he is entitled to do so after he has knowledge of the lessee's anticipatory breach cannot be taken to elect not to enforce a claim for damages. The mere continuance of the lease pending forfeiture is not an election either way. The election to be made by a lessor is between continuing to bind the lessee to performance of his executory obligations and putting an end to those obligations so that the substitutionary liability in damages will arise. Enforcing a forfeiture may be an effective means of accepting a repudiation by anticipatory breach, though the power to enforce the forfeiture may depend upon some other breach of covenant or upon some event (for example, going into liquidation) which is no breach of covenant.
In the present case it was conceded that the service of the statement of claim determined the lesse's interest in the land. The statement of claim clearly accepted the lessee's repudiation and sought damages accordingly. Thus the elements of the lessor's cause of action were established. The assessment of damages by Lusher J conformed to principle.
It was submitted that cl 10.1 of the lease limits the damages recoverable by the lessor to damages for past breaches of covenant. The submission is not borne out by the language of the clause. The clause specifies the events on the occurrence of which the right to re-enter arises and preserves "any claim which the Lessor may have against the Lessee in respect of any breach of the covenants ... to be observed or performed". A claim for damages for anticipatory breach answers precisely that description (see per Lord Diplock in Lep Air Services v Rolloswin Ltd, supra).
Perhaps there is a procedural difficulty in joining a claim for damages for anticipatory breach with a claim for possession where the services of the writ or other originating process is the means by which the forfeiture of the lease is enforced. In such a case, it may be objected that the cause of action for damages accrues contemporaneously with the service but after issue of the writ or other originating process (see Wigan v Edwards (1973) 47 ALJR 586; 1 ALR 497). No objection of this kind was taken to the award in the present case, and it is not necessary to consider it.
I would dismiss the appeal.